Industry group says carbon tax cut will not mean big savings

One of the nation’s major business groups has warned that the Government’s repeal of the carbon tax will not immediately result in major savings for consumers.

AAP reports that, in a submission to the Carbon Tax Repeal Taskforce, the Australian Industry Group (AIG) said that a lot of businesses did not pass on the cost of the carbon tax to consumers in the first place and any savings to consumers when the tax is repealed will not be large.

The AIG submission said: “The proportionate impact of removing carbon costs will likely not match the impact of their introduction."

The Government claims that the average Australian household is likely to receive a $550 a year cut from electricity bills when the tax is repealed.

To ensure that these savings are passed onto consumers, the Australian Competition and Consumer Commission (ACCC) will monitor businesses after the tax is abolished.

The ABC reports that AIG chief executive, Innes Willox said that around 70 per cent of the costs associated with the carbon tax have been absorbed by businesses and there will not be immediate electricity savings for consumers.

"By the time it gets repealed it will have been in place for two years. That's not an easy thing to wind up," he told ABC radio.

The Opposition has seized on the views presented by AIG and claimed that the Government’s ‘direct action’ policy will actually be more costly than a carbon price.

Labor leader Bill Shorten has vowed that the Opposition will not support the proposed scrapping of the carbon tax, unless it is replaced with an Emissions Trading Scheme.

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